Carbon Rises as EU Regulator Mulls Faster Glut-Fix Plan Approval

Nov. 22 (Bloomberg) -- European Union emission permits rose
to the highest in a week after the bloc’s regulator said it will
explore procedural ways to accelerate a market rescue plan to
boost prices.

EU carbon allowances for December rose as much as 3.6
percent to 4.57 euros ($6.18) a metric ton, the highest since
Nov. 15, on ICE Futures Europe in London. The European
Commission said yesterday representatives of member states will
discuss on Dec. 11 an adjustment to a draft measure to reduce a
permit surplus that pushed prices to record lows.

The commission presented two options for a timetable on
postponing the sale of 900 million carbon permits. The first is
to withhold the allowances from the market in 2014 and 2015,
according to a statement published on the EU website yesterday.
The second would spread the supply curb over three years from
2014 through 2016.

The market fix was first presented last year and originally
envisaged delaying sales of allowances at auctions between 2013
and 2015 and returning, or backloading, them to the market in
2019 and 2020.

Carbon rose 0.5 percent to close at 4.43 euros on ICE
Futures. The contract fell 1.6 percent this week.

The EU Climate Change Committee, which includes
representatives of member states, will probably aim for an
agreement in principle on the timing of backloading next month
and a formal decision later on, two people with the knowledge of
the matter said earlier this week.

Once adopted by the committee, the regulation on the
details of the market fix is subject to scrutiny by the European
Parliament and national governments. EU rules give regulators
the option to shorten the evaluation period, which typically
lasts three months. Under EU law, the commission may also opt to
seek the committee’s formal agreement in a written procedure,
without the need to convene it.